HBA-EDN H.B. 2507 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2507
By: Danburg
State Affairs
3/15/2001
Introduced



BACKGROUND AND PURPOSE 

Under electric utility deregulation legislation passed by the 76th
Legislature, competition and customer choice will begin January 1, 2002.
Under the new structure, a regulated utility no longer has an obligation to
serve retail customers in its service territory.  Instead, there is a
designated provider of last resort (POLR) that is obligated to offer
electric service at a standard rate to any customer that requests its
service. The Public Utility Commission (PUC) requested proposals from
affiliated retail electric providers to determine which one would be
designated as the POLR in an area and provide service at the price to beat.
However, problems in the California utilities market may have dampened the
interest of Texas electric utility providers because only three bidders
responded.   In addition, PUC Commissioner Judy Walsh testified that the
POLR rate is likely to be the highest rate paid by customers.  House Bill
2507 requires the PUC to appoint the affiliated retail electric provider as
the POLR for a service area.     

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Bill 2507 amends the Utilities Code to require the Public Utility
Commission to appoint the affiliated retail electric provider as the
provider of last resort to provide service at the price to beat for
residential and small nonresidential customers, unless a competitive
bidding process results in bids below the price to beat in a particular
service area.   

EFFECTIVE DATE

September 1, 2001.